This content is for informational purposes only and is not intended to provide legal advice.
Non-compete agreements are rarely used for non-executives in a company who are choosing to leave the company and take a position with a competitor. In fact, non-compete agreements are more common with executives who leave or are fired from one company and join a competitor’s business. It is both known and assumed that the lower the rung on the corporate ladder, the less likely you need a non-compete agreement.
However, if you do have an executive that is leaving and joining a competitor in Tampa, Florida, you might want to play it safe. There are two ways of looking at this question about enforcing and enforceable non-compete agreements. It is important to understand how this works based on your company’s location and position, as well as the executive level of the employee that is leaving you.
When Both Your Company And The Competitors Are In Tampa
This is the ideal legal situation when you are concerned about a non-compete agreement. Since both companies are located in the same city and/or state, both are governed by the same laws. There is no problematic red tape in the way if you have to hire a non-compete lawyer in Tampa because he/she doesn’t have to worry about what laws are in play regarding the other company involved.
That said, you can agree to release your executive per his/her request with adequate notice IF he/she has already signed the non-compete agreement. Most companies ask their execs to sign these agreements on the first day of employment, but you can ask the employee/executive to sign one during an exit interview. Either way, you definitely should have a high-up employee sign such an agreement to protect your company’s interests.
If that departing employee were to give any known proprietary information to your competitor, you can sue. You can sue both the former employee for violation of the agreement, as it is definitely enforceable in Tampa and most of Florida, and the competitor. The reason why you can sue the competitor is that they hired this particular former employee for the purpose of extracting and using the information to produce goods your company was currently producing or had in development. (You can’t sue based on the supposed intent of the competitor, but based on goods to be identical to what your company makes and that are directly tied to the former employee’s job.)
When Your Company Is In Florida, But The Competitor Is In Another State
The bigger the company, the greater the distribution of goods or services is. That said, it means that any company producing similar goods and services is of equal size and distribution across states, countries or globally, they are a competitor. If your executive employee leaves to join this competing company located in another state, a non-compete is still a good idea.
In Florida, the non-compete can be enforced, but it may be met with some challenges when the former employee is part of a competitor from another state. The non-compete lawyer in Tampa would have to look up the laws governing the jurisdiction and boundary laws of the competitor’s state and location before deciding how to best pursue a violation of the non-compete.
It may be prudent to hire a non-compete lawyer in Tampa and a non-compete lawyer in the competitor’s state so that the two can work together on a violation of non-compete laws if and when the issue arises. However, if non-compete agreements are not enforceable in the competitor’s state, this may pose some legal complications with your case. Your lawyer will advise you on how to best proceed if the situation looks like it might be a very sticky one legally speaking. (See geographical challenges at the end of this article.)
Other Potential Legal Sticking Points With Non-Compete Agreements In Florida
There is a statute of limitations on these types of cases. If a former employee discloses trade secrets to your competitor more than six months after he/she has left your company, it may be very difficult to prove your case. The reason for this is that the competitor’s lawyer or the former employee’s lawyer could argue that the supposed trade secrets exposed were learned from another individual or learned in another way besides hiring a former employee.
Likewise, it would be very difficult to prove unless the former employee came forward and admitted it. Thus, the statute of limitations is in place to prevent companies from trying to financially ruin and eliminate the competition. Most non-compete lawyers in Florida will tell you that you have less than two years from the time of the employee’s exit to the filing of a non-compete violation lawsuit. Keep this in mind if you are having an employee sign a non-compete as part of the exit interview.
Geographic scope also affects the agreement. Remember when we said that you could pursue the former employee and/or the competing company in another state? Well, you can, but Florida still limits that to a fifty-mile radius. Given Tampa’s location, it would make the fifty-mile radius requirement a tough situation with the border of the nearest state being hundreds of miles away. You may still be able to pursue it IF you can prove that the financial damage caused was excessive and the judge rules the lawsuit reasonable.
Finally, overly broad non-compete agreements could cause a violation lawsuit to be tossed out of court. You have to have a lawyer who can write very tight non-compete agreements with no wiggle room in them. That way if there ever is a problem, the judge is not likely to see it as overly broad and overreaching in scope and allow you to pursue the lawsuit. (It’s called the “Blue Pencil Law” because it assumes that the legal document is so broad that its blue ink can be erased to modify the document rather than upheld.)
The Long And Short Of It
Yes, non-compete agreements are enforceable in Tampa and in most of Florida. However, there are several problematic issues that could challenge a non-compete document. That is why you need a non-compete lawyer to help you write a tight agreement, advise you as to when your employees should sign it, and when and how you can pursue a lawsuit if there appears to be a violation. The loopholes and challenges are many unless you make sure the loopholes are all closed before your employee leaves your company to join your competitor’s company.
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